Top 10 Medicare mistakes to avoid at 65 in 2026 (Part B penalty + IRMAA traps)

When to enroll: the 7-month IEP

Initial Enrollment Period (IEP): 7 months total
- 3 months BEFORE your 65th birthday month
- Your 65th birthday month
- 3 months AFTER your 65th birthday month

Example: born May 15, 1961. IEP runs February 1, 2026 to August 31, 2026. Best to enroll in February or March to avoid coverage gaps.

IRMAA: the high-income Medicare surcharge

IRMAA (Income-Related Monthly Adjustment Amount) is the surcharge added to Part B and Part D premiums for higher earners. Based on MAGI from your tax return 2 YEARS PRIOR.

Part D IRMAA adds another $13.70 - $85.80/month.

Worst-case: top tier single, IRMAA adds $443.90/mo to Part B + $85.80 to Part D = $529.70/month above base = $6,357 annual surcharge.

Two-year lookback is the planning critical fact

• 2026 Medicare premium based on 2024 tax return (filed 2025)
• 2028 Medicare premium based on 2026 tax return

If you do a $200,000 Roth conversion in 2026 at age 63: this lands in your 2028 IRMAA tier even though you have not yet started Medicare. Plan conversions carefully if you are in or near 63-65.

File Form SSA-44 to appeal IRMAA if you had a "Life-Changing Event" (job loss, divorce, marriage, death of spouse, disaster, etc.) that reduced your income.

Original Medicare + Medigap vs Medicare Advantage

Two paths, very different cost structures and access:

PATH A: Original Medicare + Medigap + Part D
- Part A: free (if 40 quarters) - hospital coverage
- Part B: $185+ base / IRMAA - 80% of doctor visits, outpatient
- Medigap: $100-$300/month - covers the 20% Part B does not cover (no copays, no out-of-pocket max, just monthly premium)
- Part D: $30-$80/month - prescriptions, plus IRMAA
- TOTAL: $315-$565/month roughly, depending on state + plan
- Access: ANY Medicare-accepting provider nationwide (most US providers)
- Best for: people who travel, have specific specialists, or want predictability
- Drawback: highest premium, but predictable annual costs

PATH B: Medicare Advantage (Part C)
- Part A + Part B + usually Part D bundled into ONE PLAN
- Premium: often $0/month (Advantage plan covers Part B premium minus IRMAA)
- Out-of-pocket maximum: $9,350/in-network in 2026 (excludes Part D, dental, etc.)
- Access: Plan network only (HMO) or PPO with higher out-of-network cost
- Best for: healthy retirees in metro area with strong Advantage provider, on a fixed income, willing to navigate network
- Drawback: cost can spike with serious illness; network limits travel

Decision factors

• Geographic: travel a lot? Original. Stay local? Advantage works.
• Health: many chronic conditions? Original + Medigap = predictable. Few conditions? Advantage cheaper.
• Income: low income? Advantage zero-premium attractive. High income? Original + Medigap protects against the bad year.

Medigap Open Enrollment: 6 months from Part B effective date. Guaranteed issue. After this window, insurers can refuse coverage or charge more based on pre-existing conditions (state varies; CA, MA, NY, ME, VT have more permissive Medigap laws).

Switching Advantage to Original later: allowed during Annual Election Period (Oct 15 to Dec 7 each year) and Medicare Advantage Open Enrollment (Jan 1 to Mar 31). But adding Medigap outside the initial 6-month window requires medical underwriting in most states.

HSA + Medicare interaction

Critical for those with HSAs (Health Savings Accounts) approaching 65:

Enrolling in Medicare Part A and/or Part B (or D) DISQUALIFIES YOU from contributing to an HSA starting that month.

If collecting Social Security: auto-enrollment in Part A is mandatory. Effective age 65 (no opt-out).

If not collecting SS: you can defer Part A AND Part B if covered by qualifying group health coverage. This preserves HSA contribution eligibility.

Medicare Part A is "retroactive" 6 months when you enroll late. So if you enroll at age 65-and-a-half, Part A is effective back to age 65. This effectively disqualifies HSA contributions for those 6 months even though you did not have Medicare yet. Result: 6 months of HSA contributions need to be undone (excess contribution removal).

Strategy: stop HSA contributions 6 months before Medicare enrollment to avoid retroactivity excess problem.

Delay Part A: must withdraw any Social Security application AND have credible group coverage. Very few people qualify.

Using existing HSA balance: ALWAYS allowed after 65 for qualified medical expenses (Medicare premiums B/D/Advantage all count). Plus non-medical withdrawals become ordinary income only (no 20% penalty after 65).

Key takeaway: maximize HSA contributions in the years BEFORE 65. The balance becomes a tax-free healthcare savings account for retirement.

Common Medicare mistakes

1. Missing IEP and getting hit with 10% Part B penalty per year of delay - for life. $185 base + 30% = $240.50/month vs $185 = $55.50/month wasted forever.
2. Not coordinating Social Security and Medicare enrollment. Auto-enrolling in Part A via SS, then trying to contribute to HSA = excess contribution.
3. Choosing Medicare Advantage without checking that your doctors are IN-NETWORK. Specialist + hospital choice can be devastating if not covered.
4. Skipping Medigap thinking "I will not need it." Original Medicare alone leaves 20% of every doctor visit + outpatient bill unpaid. No out-of-pocket maximum.
5. Missing the 6-month Medigap OEP after Part B starts. Adding Medigap later is much harder, often with medical underwriting.
6. Defaulting to last year's Advantage plan without re-comparing. Networks change, drug formularies change, premiums change. Re-shop every Open Enrollment.
7. Roth conversion right before Medicare. Higher MAGI now means higher IRMAA in 2 years. Plan conversions carefully ages 60-63.
8. Not filing SSA-44 after a "Life-Changing Event" income drop. IRMAA can be appealed; many do not know.
9. Skipping Part D ("I do not take prescriptions"). Penalty is 1% of national base premium per month uncovered, applied for life once you finally enroll.
10. Working past 65 with small employer (under 20 employees) and assuming employer coverage is "creditable." It is NOT - you MUST enroll in Part B during IEP or face penalty.